Samvat 2078 turned out to be a year of peaks and troughs with a roller-coaster ride in the equity markets across the world. Since the last Diwali, the global market has witnessed significant volatility led by liquidity reversal, policy tightening, the Russia-Ukraine geopolitical crisis and rising inflation. However, the Indian equity market still has managed to outperform the rest of the world, all thanks to the country’s robust economic outlook.
Since Diwali 2021, the benchmark equity index BSE Sensex retreated 4 per cent till October 12, 2022, while the global indices such as Dow Jones Industrial Average and Hang Seng tanked 19 per cent and 33 per cent, respectively, during the same period.
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Considering the present market scenario, Nirmal Bang Institutional Equities Research suggests 12 stocks which may deliver a solid return to investors by next Diwali. From the large cap space, the brokerage recommended players such as Britannia Industries (Target price: Rs 4,600), Cipla (Rs 1,268), Hero MotoCorp (Rs 3,161), ICICI Bank (Rs 1,079) and UltraTech Cement (Rs 8,581).
Commenting on its top picks, Nirmal Bang Securities said, “Britannia should be able to deliver double-digit (over 16 per cent earnings over FY22-26E) growth in the medium term (more than 19 per cent earnings over FY22-25E itself). We are also bullish on Cipla mainly due to its strong India franchise, robust US pipeline, healthy margins and improving return ratios.”
It also believes that Hero MotoCorp is a key beneficiary of the 2W cycle recovery and the opening up of the economy and improving sentiments in the rural market due to improving cash flows and a good harvest season will drive the growth for the two-wheeler major.
In the broader space, Nirmal Bang Securities is positive on players like Ajanta Pharma (Target price: Rs 1,491), Bata India (Rs 2,240), CCL Products (Rs 700), Federal Bank (Rs 149), JK Lakshmi Cements (Rs 786), INOX Leisure (Rs 720) and La Opala RG (Rs 500).
The BSE Midcap index has declined 4.12 per cent since Diwali 2021. On the other hand, the BSE Smallcap index inched lower by 0.87 per cent during the same period.